How Loan Servicing Companies and Hard Money Lenders Work Together
When it comes to real estate, proper management and accounting of funds is one thing that can ease the risk often associated with investing.
Financing with an independent hard money lender should be no less secure than with a conventional lender. Most experienced hard money lenders utilize a collection escrow or loan servicing company. Unfamiliar with the terminology? We break it down for you.
What is a Collection Escrow or Loan Servicing Company?
A collection escrow or loan servicing company is an independent third–party agent that provides services for both the borrower and the lender. Their primary function is to receive monthly payments from the borrower, compute the principal and interest, and forward payments to the lender.
Distributions may also include taxes and insurance. These funds are held in the borrower’s escrow account and paid to the appropriate parties as they come due. Service providers collect late payment penalties and fees when appropriate. However, as a neutral third party, they do not collect on unpaid debts. A collection escrow servicer will hold original loan documents for the duration of the loan and release them after the loan is paid off.
Loan service providers generally receive a one-time set-up fee for establishing the collection account, as well as a monthly service fee.
Both you as a borrower and your lender benefit from an independent loan servicing company. Their professionalism and expertise as well as familiarity with local market conditions means you can rest assured that transactions will be completed in a timely and efficient manner.
An Oregon Hard Money Lender Experience Worth Investing In
Hard money lenders in the know provide quality loan experiences and the quick cash you need when conventional lenders may not. Real estate investors throughout Oregon have worked with our Gregory M. Russell team for over 30 years, attesting to our ability to provide fast, convenient, trustworthy hard money equity loan services. Give us a call to learn more. 1-888-477-0444.